Insurance Deductibles

Welcome to the shrouded world of insurance deductibles. *Twilight Zone Music*  

The famous last words I hear time and time again from the public regarding a claim are always “why do I need to pay my deductible if I already paid my premium?” and “why do I even need insurance if I have to pay my deductible?”.

How Do Deductibles Work?

If you’re a client of ZRM brokerage, the term deductible won’t be foreign to you (sorry I couldn’t resist), but for everyone else please let me explain. Your deductible is known as your self-retention limit. Essentially, this is the amount of money you’re comfortable paying out of pocket before needing your insurance to kick in. As a rule of thumb, the higher your deductible is, the lower your premium will be. This is because it shows the insurance carrier you’re not fooling around with small claims.

Unlike with health insurance, P&C insurance deductibles don’t accrue over the course of a year. In fact, they apply individually during each claim situation. Additionally, your policy could potentially have various deductible limits for assorted claim situations. This can help hedge against more likely risk situations.

Where Do Deductibles Come From?

“Well how is a deductible determined?”

Great question, you get to choose it! While higher deductibles do mean lower premiums, it is important to work with your insurance broker to select an appropriate limit. A plethora of options are available to you ranging from $500 to $50,000 and beyond. Make sure to select the best fit for your situation that won’t break the bank during an already strenuous claim situation.

Get Your Deductible Back!

Another important aspect of deductibles to consider, is that just because you paid it doesn’t mean its gone! During a claim situation, if it wasn’t your fault, your insurance carrier may be able to recover your deductible. Most commonly seen during car accidents, your carrier will attempt to subrogate your deductible from the at fault party. Paying the deductible initially however, can serve to get the ball rolling and you back in action faster.

Regardless of if you’re dealing with personal insurance or commercial insurance, your deductible is a powerful tool. Work with your broker today to find the correct balance of retention and premium.

Stay safe out there!


Remember, with ZRM Brokerage, you’re four steps away from insuring your peace of mind.

Daniel Guiney

ZRM Brokerage, Inc.

Zahra Risk Management